Chander Pal Singh, Haryana V. ITO, Ward-1(2), Faridabad

ITA 1913/DEL/2021

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1394 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2019-2020
• Appeal Filed On: 15-12-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Deemed to accrue or arise in india; Question of law
• Section: 43B; 143(1); 43

Judgement Text

Page | 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI “SMC” BENCH: NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.1913/Del/2021 [Assessment Year : 2019-20] Chander Pal Singh, House No.188, Bhatia Colony, Ballabgarh, Haryana-121004. PAN-CEOPS1197A vs ITO, Ward-1(2), Fardiabad. APPELLANT RESPONDENT Appellant by Shri Alok Kumar Gupta, CA Respondent by Shri Om Prakash, Sr.DR Date of Hearing 24.05.2022 Date of Pronouncement 24.05.2022 ORDER PER KUL BHARAT, JM : This appeal filed by the assessee for the assessment year 2019-20 is directed against the order of Ld. CIT(A), National Faceless Appeal Centre (“NFAC”) dated 25.08.2021. 2. The assessee has raised following grounds of appeal:- 1. “The Id CIT(A) erred in confirming the addition of Rs 229873 made by the Id Assessing Officer representing delay in remittance of employee contribution towards ESI u/s 143(1) of the Income Tax Act 1961, ignoring the fact that such addition was not attracted under the said section. 2. The ld CIT(A) erred in confirming the addition of Rs 2272480 made by the Id Assessing Officer representing delay in remittance of employee contribution towards PF u/s 143(1) of the Income Tax Act 1961, ignoring the fact that such addition was not attracted under the said section. 3. The Id CIT(A) erred in confirming the addition of Rs 229873 made by the Id Assessing Officer representing delay in remittance of Page | 2 employee contribution towards ESI in contravention to the applicable law and the decisions of the jurisdictional courts. 4. The Id CIT(A) erred in confirming the addition of Rs 2272480 made by the Id Assessing Officer representing delay in remittance of employee contribution towards PF in contravention to the applicable law and the decisions of the jurisdictional courts. 5. The Id CIT(A) erred in confirming the addition of Rs 229873 made by the Id Assessing Officer representing delay in remittance of employee contribution towards ESI relying on the amendment in section 43 B and 36(l)(va) of the Income Tax Act 1961 brought in vide Finance Act 2021. 6. The Id CIT(A) erred in confirming the addition of Rs 2272480 made by the Id Assessing Officer representing delay in remittance of employee contribution towards PF relying on the amendment in section 43B and 36(l)(va) of the Income Tax Act 1961 brought in vide Finance Act 2021. 7. The Id Assessing Officer erred in rejecting the principle if two views are possible, one in favour of the assessee should be adopted keeping in view the facts and circumstances of the case and he ought to have deleted the addition of Rs 229873 and Rs 2272480 respectively for late deposit of employees contribution to ESI &PF. 8. The appellant craves leave to add, amend, delete and modify any grounds of appeal before/during the hearing of the appeal and all the above grounds are without prejudice to each other.” FACTS OF THE CASE 3. Facts giving rise to the present appeal are that the assessee is an individual and proprietor of M/s. SRV manpower, engaged in the business of providing labour force to industrial units, filed his return of income on 09.10.2019 declaring total income of Rs.16,10,770/- which was assessed at Rs.41,13,050/- by the Assessing Officer, Central Processing Centre (“CPC”), Page | 3 Bangalore vide order 21.02.2020 u/s 143(1) of the Income Tax Act, 1961 (“the Act”). The AO made an addition of Rs.25,02,350/- against the assessed income of Rs.41,13,050/- on account of payment of employees contribution to PF & ESIC by the Central Processing Centre (“CPC”), Bangalore on the basis that the same was deposited after due dates, as per the respective Acts. 4. Aggrieved against this, the assessee preferred appeal before Ld.CIT(A), who confirmed the addition. 5. Now, the assessee is in appeal before this Tribunal. 6. Ld. Sr. DR vehemently submitted that law is clear in this respect and he relied upon the decision of Ld.CIT(A). 7. At the outset, Ld. Counsel for the assessee submitted that issue is squarely covered in favour of the assessee. He relied on various case laws. 8. I have heard the contentions of Ld. authorized representatives of the parties and perused the material available on record and gone through the orders of the authorities below. The issue in this appeal is related to disallowance of expenditure on account of delay in deposit of employees contribution related to PF & ESI. The issue is squarely covered by the judgement of Hon’ble Jurisdictional High Court of Delhi in the case of PCIT vs Pro Interactive Service (India) Pvt.Ltd. in ITA No.983/2018 [Del.] order dated 10.09.2018 held as under:- “In view of the judgement of the Division Bench of Delhi High Court in Commissioner of Income Tax versus AIMIL Limited, (2010) 321 ITR 508 (Del.) the issue is covered against the Revenue and, therefore, no substantial question of law arises for consideration in this appeal. Page | 4 The legislative intent was/is to ensure that the amount paid is allowed as an expenditure only when payment is actually made. We do not think that the legislative intent and objective is to treat belated payment of Employee’s Provident Fund (EPD) and Employee’s State Insurance Scheme (ESI) as deemed income of the employer under section 2(23)(x) of the Act.” Therefore, respectfully following the ratio laid down by the Hon’ble Jurisdictional High Court in the above-mentioned binding precedent, I hereby direct the Assessing Officer to delete the disallowance. Thus, grounds raised by the assessee are allowed. 9. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 24 th May, 2022. Sd/- (KUL BHARAT) JUDICIAL MEMBER * Amit Kumar * Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI